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WHAT
IS
THE MEANS TEST? If your average monthly income
exceeds the median income for a
family your size in
your State, then you have to pass the Means Test to be
eligible to
file a Chapter 7 bankruptcy. But if your
debts are not primarily consumer
debt, then you
don’t have to take and pass
the Means
Test. The Means Test seeks to
determine if you
have sufficient “disposable income” to fund a Chapter
13
bankruptcy plan. If the Means Test reveals that you have more
than certain amount left over at the end of the month, you will not be
eligible
to file Chapter 7 (unless it is established that special circumstances
exist). Note: The Means Test also has ramifications
for Chapter
13 filers as well. DISCLAIMER Seek professional legal
advice regarding the applicability and calculations pertaining to the
Median Income and Means Tests related to bankruptcy.
The issues and laws related to this article (and
bankruptcy in general) can be complex.
This above is a generalized explanation. Further Disclaimer
Author:
Attorney
Matthew
B. Tozer |